M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

Friday, February 11, 2011

Avoiding change in control provisions

Back in the fall of 2009 Merck acquired Schering-Plough.  In order to avoid triggering a change in control provision that would have resulted in Schering-Plough losing its license to sell Remicade- a $3 billion a year drug for them, the parties structured the transaction as a reverse merger and had Schering-Plough acquire Merck, with Schering-Plough as the surviving corporation.  Then the changed Schering-Plough's corporate name to Merck.  Yeah, it seems too cute by just about half.  In any event, J&J challenged the S-P/Remicade license in arbitration arguing that there was a change in control - even if S-P was the surviving corporation and that the whole transaction structure was an artifice intended to avoid the change in control provision.  Of course, they're right.  But does that matter?   Reuters is now reporting that the arbitrator's decision could come down any time now.  Here's the story. 



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